It is headquartered in New York City, and has created a standardized contract (the ISDA Master Agreement) to enter into derivatives transactions.

In addition to legal and policy activities, ISDA manages FpML (Financial products Markup Language), an XML message standard for the OTC Derivatives industry.

ISDA has more than 925 members in 75 countries; its membership consists of derivatives dealers, service providers and end users.

This change was made to focus more attention on their efforts to improve the more broad derivatives markets and away from strictly interest rate swap contracts.

In 2009 a New York Times article mentioned that in 2005 the ISDA allowed rule changes to CDO payouts (Pay as You Go) that would benefit those who bet against (shorted) mortgage-backed securities, like Goldman Sachs, Deutsche Bank, and others.

[5] According to Financial Times reporter Stacy-Marie Ishmael, the Master Agreement is "fundamental to, and provides a template for, the derivatives market.

Key changes in the second edition include:[8][9] On April 8, 2009, ISDA introduced further compulsory modifications known as the "Big Bang Protocol."

The Settlement Amounts (which may be positive or negative depending which party is 'in-the-money' with respect to a particular Terminated Transaction) and unpaid amounts (again positive or negative, depending on who owes them) are added up and a single figure in the Termination Currency is determined payable by one party or the other.

[11] In March 2012, ISDA issued a statement declaring that Greece, through passing legislation that forces losses on all its private creditors, has triggered the payment on default insurance contracts, thus instigating a credit event.